Examination of the scope of management prerogatives in negotiation raises the question of available guidelines for school boards. State legislation indicates that the scope of bargaining ranges from narrow restrictions to broad capabilities. Management prerogatives include the power to oversee budgets and hire and dismiss employees. School officials must address the general statutes to determine the scope of their powers. Intent of state legislation is used as a base for court construction of what constitutes management prerogatives in bargaining. In most states, this intent gives broad powers to school boards. "The balancing test" means that courts examine issues within the scope of bargaining and balance the effects on groups within the school community. Courts consider the governmental policy-making nature of the school board and examine issues in light of differences between private sector enterprise and the public entity. "The impact test" determines whether school management or the employee is affected more by an issue. Under this test, courts rely on specific wording of state statutes and on rational decision making. Although courts use tests in determining management prerogatives, the area lacks a definitive statement on time limitations. The trend is toward increasing management prerogatives and a lessening of conflict in educational and governmental policy making. (CJH)